This Metric Says You Are Smart to Buy CVR Energy, Inc. (CVI)

In today’s marketplace, there are tons of gauges shareholders can use to monitor the equity markets. A duo of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce the market by a superb amount (see just how much).

Just as crucial, optimistic insider trading sentiment is another way to look at the world of equities. There are a variety of stimuli for an executive to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).

What does the smart money think about CVR Energy, Inc. (NYSE:CVI)?

In preparation for the third quarter, a total of 16 of the hedge funds we track were long in this stock, a change of 7% from one quarter earlier. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

According to our 13F database, Carl Icahn's Icahn Capital LP had the biggest position in CVR Energy, Inc. (NYSE:CVI), worth close to $3.3748 billion, accounting for 15.7% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $31.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include John Overdeck and David Siegel's Two Sigma Advisors, Cliff Asness's AQR Capital Management and Joel Greenblatt's Gotham Asset Management.

As one would understandably expect, certain money managers have jumped into CVR Energy, Inc. (NYSE:CVI) headfirst. Icahn Capital LP, managed by Carl Icahn, assembled the biggest position in CVR Energy, Inc. (NYSE:CVI). Icahn Capital LP had 3.3748 billion invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also made a $31.4 million investment in the stock during the quarter. The following funds were also among the new CVI investors: John Overdeck and David Siegel's Two Sigma Advisors, Cliff Asness's AQR Capital Management, and Joel Greenblatt's Gotham Asset Management.

How are insiders trading CVR Energy, Inc. (NYSE:CVI)?

Insider buying made by high-level executives is at its handiest when the company in question has seen transactions within the past six months. Over the last six-month time frame, CVR Energy, Inc. (NYSE:CVI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We'll also examine the relationship between both of these indicators in other stocks similar to CVR Energy, Inc. (NYSE:CVI). These stocks are Access Midstream Partners LP (NYSE:ACMP), Western Refining, Inc. (NYSE:WNR), Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI), PBF Energy Inc (NYSE:PBF), and InterOil Corporation (USA) (NYSE:IOC). This group of stocks belong to the oil & gas refining & marketing industry and their market caps are closest to CVI's market cap.

Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

Using the returns shown by the previously mentioned studies, average investors must always keep one eye on hedge fund and insider trading activity, and CVR Energy, Inc. (NYSE:CVI) is an important part of this process.